IN THE MATTER OF THE LEVESON INQUIRY INTO THE …webarchive.nationalarchives.gov.uk/20140122145147/http:/... · oq~ tr~ ’Xx OUT OF THE HOUSE The prime minister’s strength and

For Distribution to CPs

IN THE MATTER OF THE LEVESON INQUIRY INTO THE CULTURE, PRACTICESAND ETHICS OF THE PRESS

OEXHIBIT SJM5 TO THE WITNESS STATEMENT

OF SIR JOHN MAJOR KG, CH, PC

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PRIME MINISTER

~~ 18 August 1993

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RUPERT MURDOCH 1’:~/~ ,

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Rupert Murdoch has large business interests in the US, the UK, Australiaand the Far East. Annex A lists his UK media interests. He is therefore veryinterested in what is happening to the world economy. He will be particularlykeen to hear your views on the prospects for the UK economy. Given Murdoch’shigh level of debt, he is very keen to see interest rates as low as possible.

Overall, Murdoch’s views are very much anti-union, pro-free markets andfloating exchange rates. I was surprised to learn, given the worldwide s~e of hisbusiness, that he ’phones Kelvin MacKenzie most days to keep up to date on theBritish scene. ]

]This explains why Murdoch frequently obtains very biased views otwhat is happening here. It is also clear that Murdoch is aware, in outline termsat least, of the line taken by his papers. However, I very much doubt whether, hereads them regularly.

I would suggest that you use the opportunity to deliver the followingmessages:

a. UK economy recovering well. Will be the fastest growing Europeaneconomy this year and next.

b° Recovery started in middle of last year, just after election. Period inERM invaluable in squeezing inflation out of the system. Germanreluctance to lower rates made it impossible for us to stay in ERM.German attitudes haven’t changed and no surprise that ERM has nowbroken down. EMU timetable unrealistic. But many Europeans willtry to revive the corpse.

Ci We have got inflation under control, hence lowest interest rates for15 years. Now tackling public sector deficit. Will need toughdecisions to keep to announced public expenditure levels.

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d.

e.

Government’s ability to take tough decisions is constrained by size ofmajority and behaviour of some rebels.

Your papers have made matters worse. They have ceased to makerational criticisms of policy. They are now simply anti everthing andanti me in particular. (see attached cuttings.) This is bad foreconomic confidence and hence, bad for business. Longer termpolitical repercussions difficult to assess. Conservative MPs now seeno reason to be helpful to media. [Pressure growing over privacyrules, VAT on newspapers, cross-ownership. I am not keen to moveon any of these areas but MPs from all parties becoming increasinglyattracted to them.]

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A T O’DONNELL

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Artnex ,A

Murdoch’s UK media interes~

Newspaper CirculationJan-Jul 93 % change on

Jan-Jul 92

QSun 3,527,000 -2.0%Today 537,770 +8.6%

¯ Times 365,876 -6.3 %News of the World 4,619,596 -2.2%Sunday Times 1,224,317 - 1.8 %

The decline in circulation of most of these papers has taken place despite bigspending on promotion, eg the Sun spent £5.4 million during the past year. This -is one reason why the Sun decided to lower its cover price to 20p from 25p, whileits main rival, the Daily Mirror, increased its price to 27p. I am told that the Sunhas gained readers as a result of the price cut, but it would be interesting to knowif their total revenue has gone up.

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The Times is the paper that should be worrying Murdoch the most. TheJuly figures show a further drop in circulation. They have toyed with the idea ofcutting its price (and have done so in Kent as a trial) but the real problem is thatthe Times keeps changing its strategy. It has had five editors in the last 10 years.Rupert Murdoch must be wondering whether he should have held out for his firstchoice, Paul Dacre, who has increased the Daily Mail’s circulation by 5%, insteadof Stothard. The only good news for the Times is that the Independent is doingeven worse, down 9 %.

Murdoeh also owns BSkyB which is now doing rather well.planning a launch of a new subscription package from 1 September.remember he invited you to the ’celebration’.)

They are(You will

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without revolt, and resin,It~mn*v t, as empty as tms_ .w~.= ~---.2=--=--. threa ¯ urch mat meuto the Tory voters of

Any de=ion that d~s.ta~...p~=."=autumn will be for the leadersmp o~goveming parr, m ~ theseats in Parliament. The

quidomed am su~=.=stop~ it is ~g =~ain now.

OPENING WHITEHALL’S DOORReducing offidal secrecy will be a daunting task

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sides,this derision senm

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shjury ~al sirnplygives them a bert

Mighty eh;From tl~ R~ghtJohn Bicker~tethsk, -Judges willjury" rum your(July 6). Yet in ththere is no jurydoes not exist al

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THE TIMES SATURDAY JULY 24 1993

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’Xx

OUT OF THE HOUSEThe prime minister’s strength and authority remain in doubt

Gratefully, like children chastened by themere threat of a beating, the Tory party at

public disorder of Thursday nigm, t~ ywas quieter. On Thursday the primeminister had taken his true gamble; he haddecided that a general election would followdefeat in the confidence vote. The practicalenacting of that decision, the winning of thevote, was much less dramatic. Only thehardiest Tory opponents of John Major andthe Maastricht treaty were likely to vote foran election which they would lose: andeventually none was hardy enougl~ to do so.

On Thursday the story was ot a Rue primeministeriai speech, whose virtues wereundone behind the scenes. The humiliatingprice that he paid was not for that day’sperformance but for all the mistakes ofpolicy, personnel and principle he has madesince September. Yesterday it was theopposite story. Mr Major was tired and dull--and could be forgiven for that. But incorridors and offices the mood was of unity,a peculiarly sullen and defensive form ofunity but unity nonetheless. The partybosses want to draw a line under the past.

That will not be easy. Can a primeminister, whose authority has been broughtso low, ever rise again to command therespect necessary to lead? At a lime whengood economic news has so little impactupon his personal .standing, can he eVena~his faU? Will me conservative pare!famously ruthless in pursuit of its ends onceroused, endure a leader whose problemshave appeared so endless?

The answers were not clear yesterday. Thegeneral drift of the verdicts, however, wasnot encouraging for Mr Major. Douglas

Hurd made a sp]n’ited appeal for a fresh startbut enhanced his own reputauon more manthe prime minister’s. The power of KennethClaxke’s interventions was contrastedfavourably with that of the prime minister --not just by John Smith, who greatlyenhanced his leadership of the Labour partythis week, but on the Tory benches too. MrClarke should perhaps not have given hissupporters that bpgxatunity. But he did. ThepoNint was made.or will the right-wing candidates bequiet in the face of such new possibilities. OnThursday senior .cabin.et mem~.r.s agre~lthat only a dissolution tin-eat wouia stem meanti-Maastricht tide. But p.art of the nan.’0.naltide is against Mr Major himseN-- ana matmay be stemmed without a general election.

Meanwhile the Treaty on EuropeanUnion remains as federalist as Rs tideoriginally proclaimed- The only difference isthat more people are.more .aw.~ ~ of ~egambles that the prime ~ ongmauytook; also of the extent to which the successof those gambles -- m. keep’.mg Bfi.l.ain fr.~ ofmonetary union and intrusive soaai tegma-tion -- depended .On Mr Major’s ownstrength and authority..

That authority remains in doubt. MrHurd tried hard in his ~to be generousto the rebels. But they ’do not want thegenerosity of the victor; they want increaseddetermination to fight for their concerns mthe next three years of negotiations. Moreblood will be sp~t durin..~ ff.ds p~, onboth sides. "Nae ponticai mooa m mecountry begins in the House of Commons,"Mr Hurd said. The country will rememberThursday’s mood rather longer than that ofyesterday.

END OF AN ERAChanging of the old guard in Italy

Under the dyspeptic ~ of its 1 .e~ie. r r Mi~foOrMarfinazzoli, dubbed the gravemgger, tohis tendency to draw on funereal metaphorsto characterise his party’s plight, Italy’s onceformidable Christian Democrat party ismeeting in Rome this weekend. The IX: isstill the largest party in Italy, but its legend-ary ability to garner 3S-40 per cent of the votethrough a cunning fusion of appeals tofamily, church and.state has.evaporated..in

find minor consolation in the near-dis:memberment of the socialists in the wake ofthe s~ndalous parliamentary vote last.Ap ofilfnot to lift the immunity from prosecution oits former leader, Bettino Craxi. But there isnone in last month’s relatively solid perfor-mance of the Democratic Party of the..Le~(PDS), the renamed ex.communists, wmcnhung on to its own centtxl "red bdt".. As~eold political system disintegra.tes, .me rt?.~

Dentistsof HIV (From the Chief £

Sir, The headlin~old’s article (Juts won’t follo~patients’ lives", ’rate and misle~

;’ fears aIattac

Your re;in general mustthe safety of den

The Acer cas~inddent anywh~patient becomin~ffter seeing a he

Mr Mangold99.994 per centAcer’s virus tha~The Centre fc(CDC), the wospread of. Aids,option that "Asomehow enter~etients". In o~infection wa

not

There seems tin the USA thhave been sp~could concludeually ruled outduding handpiHIV transrmssTom Marigold ccure patient-to-dental handpi~any evidence fworld that this Itransmitted arHIV.

There remaisibility that h,source of crossreason the B:ation’s guidelhshould be sterafter each use.lem in adheri~not "for reaso,because they dguidelines" buthat many ha~by the process.

GuidelinesTom Mangoldtions exist antincorrect in st~been struck offCoundI (Gin:the guideline-�off. althnmzh

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"’ 3G~ttlflHlllll~fllllllllHIl_~"= _-:--" TSe i i=

’mtri =li=

= ~Lmes has =,,. ~,~ ,,ly. I~, == ~

~, John Major= dismisses the past 12 months.

You’d almost think the messin hasTories.

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"POUTICS has been ratty silly, It’s-==been a sleazy period."

the Prime Minister is in has noth- -Jug "t~¯ do with. the

Mr M~jor seems to think it’s~- mostly ’the=fault of the Press.==

Dmrid Mellor was caught with-=--.his shorts dow~ and took a free-ibie holiday.

And who was s{Z[y? =_---_-Michael Mates sent bail bandRi~-= Asil Nadir an engraved watch.

Unpoputa,r" Mr Lamont went over his

.-=- Access credit limit and forgot to Z=

ipay the bi].l,

i

Between them, the Cabinetmanaged six ~-turns in 10months.

iTlmt’s whtl Mr Major is thei

most unpo~r Premier ever.But he s about to pull off the

sleaziest, siRiest trick of all.

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| == John Major has done his second -=-[ i U-turn in 24 hours. --=| = That makes it six in 10 months: -

| = school tests, adoption c_h, arges and _-=| --: now unmarried mothers benefits. --=| E_ That’s why the Prime Minister’s:__--| -= popularity is at a record low. -’ =- He ft°ats ’deas then retreats =--

( ~’~’~ | = A strong government is-

O~ | = supposed to stick with what it -~ | =-honesUy believes in. =

i i Mr Major gives the ~pression =| --= of not knowing if he’s ~�oming or -_=| _-: going. ’ -=| =-- If he’s not careful, someone wili =--| ~ make a big decision for. him... -

Jisn’t ar: . . " ---=

| | Stella R_’~gton, the, head of =-| ~ MI , boldly steps out into the" _=| E limeliEht ,| =It is the first time one of =| =~ Britain’s spy chiefs has spoken-=| ==- publicly and gone on TV. =| i "Stella, who spearheads the-

G NIGHTMARES AGAIN, MUM?" : ~ successful camp~ ~t the == bravely shrugs offthe -

dangers.She also reveals that more spies ffi

are women than men. ..... Wtm rows wem~ ~=et lump a: ~mmt~

IT’S not just meat and two ves helmprepered bt the oanteens atW"nRehal~

Even the is

~=’I~ne=yl~ve been cooking the booksThe taxpayers m that’s YOU

have been cheated out of£1million.

Inland Revenueomed £450,000.

Incredibly, the, blame lies with ==the iWhat hope, is there for.the ,oountry =whon the ~r of ~ ~so strings -

be trdstOd tO run ,11r ~:’$hop~p ==

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"WE’VE INSTALLED k CAT-FLAP FOR HIMI"

= Have ~you ever nearu such -=- nonsense:

r ~j Welfo eIt’s like telling a couple

can’t adopt a’ h~mdieappedbecause, they. haven’t lost aand don’t Understand wnazlike to llmp.

The only thing that matters inan adoption is the future welfareof the child.

Not ,ore ==ps-raps ==~!~~

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JOHN-MAJOR ha|. om!tid.O!lt at Wll!0!!hesuooeeds iike few Pdme Ministers inhistory.

The ability to shoot himself inthe foot.

In an unguarded moment, hebrands three of his Cabinet Minis*ters "bastards."It is a Sl~i~ft~ vimtiefive attack

" Worse, it comes as the party ispromising "no recriminations"after the Maastricht debacle.

If Mr Major wanted to reunitehis- ~ty, this Was not the Way.

It is no surprise that the"bastards," as the Prime Minister

so :uncgUthly"puts it, are thechampions o~’ the Right, Whichhas given him so much aggro.

MICHAELHOWARD: The HomeSecretary/Shows a gut instinct forthe~-~ary people think. IfThe Sun could choose the nextPri~e Minister m which sadly wecan’t---Michael Howard mightwell be the man.

PETER ULUEY: The SOcial Sec-urity Secretary has quietly got ?nwith one of the most difficult JODSin Cabinet. But the wimps areafraid to listen to his sound, butunpopular, advice.

MICHAEL PORTILLO= The ChiefSecretary at the Treasurystaunchly believes in lower taxesand lower public sl~nding. Buthe must sometimes wonder abouthis boss, Chancellor Ken Clarke.

i

ILeadership

Mr Major damns himself withhis remark about the ThatcheryearSnever beinwas~, "the. golden era that

When Maggie was at No 10 wehad firm leadership. We haa lowunemployment and high growth.We felt proud to be British. .

John Major was happy enoughto hanl~ on to her .coat-tails on hismeteoric .rise from nowhere.

Compared to Lady Thatcher,Major is a political pigmy.

what o.r er= h=s hl p.. dod

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at a time when"itmost -- is leadership.

Instead we have had a ditheringGovernment that has lurchedfrom crisis to crisis, most of themself-made.

John Major is: an honest, decent,likeable iman. ;

He has-done his belt but. smlly,, itJust densn, t sesm ~ enoush,

in the face of certain election

needed it i

ON THE FLOOR... troubled Join Major in the Commons

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Mcked liesI

.... when the ~.~-rmm = h~- THERE are Ilu. damned lies and Dallysy ~mvon mOWANAm.m, ~ ~==m.~r~ in the Ct~rist- Mirror exelusives.~ church by’ ele~on.

JOHN Major won and lost xt will I~u~ on ~ ~e Today we expose the wickedsummer to the ~ ~nrer-yesterday. He WON o enee in nlaekl~ll,eel~h~h~ Way the DaLly Mirror manipula,t~d!back-me-or-rack-me l~m-re~ To~ the tragic death of an old hay.chance to have their say.showdown with his MPs- xt will .~mmor unto the ~d ’l~hey used her to make a polit-and finally cleared/~as- eleet~n, in the ~ When ical point. The truth, and the hurt =flagship councils llke-Wands-" it caused her husband, did not Etrid~t off the Commons worth in South London--Win-timetable, bol of’ Toryism--roll to the matter a damn to them.

uher~s,, " I= The holier-than-thou Mirror is a,-He LOST by reveal~ But it wi:l bm’st Into lureIB disgrace. =to his troops that under ~in in June u LefUee sweephis leadership they will - And tlmfl Im lie, . i_

Europe~ Parliamentcrash to defeat when eda.into power in elections for the

general election is call . . The mood jrnpm She Ctkbtnd,o o,..o,o. -’ "-Ii it’s a bowls up iminis. ..,... hedit. Having been forced to ~durein the face of certain election Major ~0 a bruited ~Lk.defeat, I:~.ople realised they , ,eannoi rkk-keeping him as one. But’h; could survive prise el~.o-~FJ~y~.,~ AngrJ |leader." another year--which will be a a Jubilant Mr w, uor 00saum.: ¯

long. unh.ppy one for ¯ .~n..i- have never know~ nu~ a OUR odeketorl are pathetM. Just Ilk0tive, insecure man wno narespolitical mistake.’~ He still Street vms

It is hard to find anyone at personal critidsm. . .. elin~ i..ocent~ to that ~ew. ~.~ the line th~ the their exenus. =¯Westminster who believe?_ John Behind the Ilghtnmg-qmeg . O.e fomer ,anaror salt:

wo~ is now over. with ~ AS we kiss goodbye to theMs~r will survive to celebrate professional smile, John Major ’Even today, he believes that drawing a line under the

his third anniversary as Prime rages against what he sees u if he get= a feeling aboutpean Issue which haul spl!t the Ashes, they whine that the wrong =Minister on Novemt)er 28. the l~t~stice of his position, somethinE, it ~, ~ to Wt,~. They e~m the PHn~ pitch has been dug up at i

Some would llke. him to do He does not see it as h~. a~ Itr~th~tHe IS f~l ~Minister will bomtce back, Headingley. "strengthened after bnmdlshlng That’s almost as daft as British

th~ "decent thing’ snd quit fault that the Pound crmd~d and ~t h~Uv~n, an iren fist In the face of "this weekend, out of the Euro.money system

Others wamt the men in grey last year, or that it took so~ "It has led to semo ex-rebel hanU~em Rail’s excuses about the wrongsuits to carry out a mercy long to sack Norsmm; L~mon.t~ tremely emberrmming Govern- But they saw the f~ or kind of snow blocking the lines.killing to put him and them-Mi.eh§el Mates ano uavta, ment decisions." panic-stricken Tory MPs sittil~selves out of their misery. Meuor. behind Mr M~Jor as he made We’ll see how bad the Test

Sixteen months a~’ter an Or ! tat he had to � rder U- his back-me.or-sack-me ulti.

ipitch is...

flirt bowling. Iheroic general election tri. turns over the pits closure mature yesterday.

umph, John Ms0or is mortally fiasco, armed services cuts or And they know this III a -When the Aussles sweapon the Prime Minister esnwounded and is unlikely to use only once.

imllfllflmHiiiimlllllflilllltH~=

OUR orleKetws are palheUe, dust like

Some would like. him to doth~ "decent thing’ and quit That’s almost as daft as Britishrebel herdliner~

Others want the men in grey

The taste of this week’s de-Sixteen months Or that he had to order U- feat will stick in the throats of

Tory MPs as they face up to nmtum yesterd~.angry and bewildered voters in

income.linked fines, their censtituendu. It will belead the ratty into the next In the aftermath of his sur-" bitterly reinforced on Thursdsy

@ -.._

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Li. not up to..; b ![ IMiZs[°und their humilia:ed palm’ :

| Every Tory MP knew ~tna~~ .. -[ General Election woulct speu =l suicide. ’| It would have been the first -| recorded Lrmtanee of’ turkeys vot- ~.| ~ for Christmas.. .. -=] John Major may have won me -

bloody battle ¯over Maastricht- -i . But has he lost the war: his i1 His authority is in tatters, " -I credibility in~ pieces. . ’ .. =-_-I To many at. Westz~ster ~ne _==

question is n?t_can ne survlve, =-but when will ne go. -

Humiliation. -

z~e~ ~~ the To~ face _t’uz~er hum~ation when me We -

’ Christcl~ ~ ~or~ _-:true-blue in the country,¯ -

=

recorded instance of’ turkeys vot-ing for Christmas.

ers of Christchurch,most"deliver a by-election verdict. =

When a Prime Minister ~ot -=-inspire victory in a constituency -like that, when he can only get a |crucial vote through., the Co~v=~ iby _On~ats and ~, the ~e has -surely come tor a change. ~=¯ WTmt the COw~hen~ ~ lacked- -at a time it needed it imost- is leadership. ~_=

Instead we have had a d~t~ce~’ ,~Government" that has, lurcn ffifirom crisis to .crisis, most of them r=self-made.¯ Jolm Major is an hon.est, decent,likeable man. .

=’~ult ~ =eom =¯ H~s=m ~

=

~m~~ i .... |Today we ~’the i wieked

~y the D~.y .~r .’~o~~the tragic aeam oz an om my.’l~ey used her t~_ m~.e a I:~, h’t: i

ieal point. The tm,t~, av.~t tn.e nu~..it c~nsed her husband~=;:ma no~matter a damn to them;

The holier-than-thouL~Y"~Or is a.

~ea" ithat.s no .a ¯:_ m m --"

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~ky Friday July 23 1993

faceshiS

~eat

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: I)irv nmdlesex, reve~ that a ~m-year Stady rams

dayt~rtfieweek . ..= . .I~. mSud~y. It soums_ age. me best

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her way

David Fenc,ey

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_.

THE SUNDAY TIMES .25 JULY 1993

The Lazarus pt on0vision by the end of this decade, Last week’s

eras.tits ~mv~ !~. ~ resilience and determ- /a99y3d~oug~dY being a~leved barely half-,t; ¯ anutactuang productivity has any remorse about what they did last week-on ,n =v=,tty.he ms,.us. Snm d 10.5 , eve, ,,st while" n,i, : IST , ,oy:wage costs have fallen b), 5.3%. All we need ¯ 5- =.. aese~lions. Thatway des vain. The rebels have served noticethat one inch further towards Euro-federallsm

. . ¯

2,3

dme-hambs are ticking away in Whitehall.

.~,,inc wiii va~’-" ~L-°~:’ ~ U~h=lconvalescence tL- ~- -= ~,.~. Y return from--li’; ’ , ,mr Mr utarge will nutke ap,, uCa= success (as well as economic sense)

budget in November and, above

menl .he was fnoced to take the desperatee x _p~_ ~at of !luea..tening his own party with,,,-~,= ocsivactlon ,n an elo..-lion. Such a ter-rifying pmsl~~ Cowed the rebels into sub*mission on Friday; but as a fonmula formaintaining Tory pat1), discipline during the

of this parlismem zt only .ervus to under-~1~ Ifl~ pn,’me mi_ "nister’s continued weah~s,n "tact .mat Mr Ms)or had to wheel out his

nclenr Oeterrenl to keep his job shows howcnio~mien.i~d~_ ,,5!’ nothority and pmsdge have be.. ,.c wesuninster consensus is that de-spite Friday’s victory, Mr Major is holedbelow the water line and likely to sink duringthe next 12 months. There is much evidence.to support this prediction, above all Mr Ma-

tJ~__? ~red!lectinn for shooting himself in the=uu=. uut it need nof Come ~lle.

Maastricht was supposed to be the found-align stone for a Eumpenn edifice that is un-l~e~.v,~r.,.io ~ ~i~. The arguments

6,~-, ,m; r.,un.q~.an ~Ommunity are nowgoing Mr Major’s way;, his vision of Europets the one that matters. At the Same time hepresides over an economy that is recoverinewell and could be in Europe’s premier d~

ter. as this newepq)~ has argued before, is the.smtlegic. vision, to drive Britain ferward andme smgm-minuee~ness not to be dive~.ed from_tSe..pm~uit of .tlmt vhinn. With Maa~icht outor me way nna me ~m~omv ,.-~.~-,,.,~.~ .~.condition= exist for a re,.;-’-’, ":’Z;;-"~’;~: ~

pntmn politics. The stock-mark= o~icsnot an investment for widows or o~h,=,~.

out..~, shrewd investor with cash to’s~..~come oo worse than buy a few Majorsres~

low.

Hein his ow~

get away for a completeb.re~ during the recess, top up his batteriesaria make su~., on his return, that his goveva-Itll~:lll ~ a sllsj’pel’ rucus ~ sl more C~-

is clear:.prospects have

~y the brcsk~way from theaead hand of the EuroFennexchange,rate

-ueete~ o,ce more and the British lab.m~ket.preperly reflects market con-

=uons mr me first time in living memory.~e economy has grown so stro~,,h, in ;~n?t.half of ~is year that the ’~l~u~r~,s ~.get forecast of !.25% growth for the whole of

to Complete the reCoveW is a return of con-fidenoe in the government. Given that, Britain

redid .nc.hie.ve 3~b~.,~ growth rates for theormls aecade. ~at must now be Mr" Ma-jor~ overriding strategic goal.rem~a~atni_nzeans, cle.aring" away the Treasury’s

-8 Cooweos. Kenneth Clarke, thechancellor, must stop regretting Britain’sno ,,me 1o

...... ,,,a we..e~etl~l finas the whole

at--- . ,~.. ¯ Frnnch franc couldm,y moment while the Belgian franc

Danish krone and the Spanish peseta

__ ." .... u eemuCdve of jobs andprorperkyas ks predeeesmr was in the 1930s.Its demise wi!l he s further sign that European

; .are going the British way: Ganger to the ToW party is that while

; has grown weary of it all, the~govemment has yet to shed its di~., ....Image and realise ,t.o. ~_,._ ~ ::~--,-t?.,~mumt Ju~m ..~mlUI S Lanour~ h.as., !. ~e~®d .the vat. ue of unity ate, d, disci.v , wnucn useo to ce the Tories secret

¯ .. c~ro-scep/ics have organised anoppos~tton within a governing party, without

~ the COmingn "mat after 14yem and

vtctories, the ToW partyts n o(,c[umb.li.ng through metal fatigue.,_~. atmn Major the mart to tam his panv’s~ut~unes ronlKI " * ¯ - -? Tins week s Chnelection result will cast fr,..h m~ch.um_hby-out, in truth. ----.. -v.tn twill mat

the seat’s loss.the ERM and

isthe last

run out. Christchurch will be a serion:~Ltl~ s~. Mint~l~ may scoff st~,~,m ue.anocrats anatchin~, a "~-" ¯

"~ 1~ litllJiy U|era-safe ToW seat. but ¯ ..... .¯ , , . mr~ajorsgovem.merit has a dlmJn~sinnx maiorlt., to ,,-’,,

wearing thin. He must ".11 ,k. ,,,__._ "~._o~’ spring at the latest ~ ~,"y~a;eU;os._mu_ ~nd..~en m next year’s local and u""~’~--a- -urea adamont elections Heavy reverses"--mPean par-

men wouldspell the end of his time in No 10.As parliament rises for its long summer re-

cess this week, Mr Major must hope no more

will continue to reCOver,of rece~ion,

¯.While p hce huff and puff,crime blows the house down

still treals the police w’th sympathy.The force must be honest in eu, people me g~Ing up They

_ the.face of the critical .~. ~e~=me" ~g~:�~,d ,=;v,=,sS = :: ;:> ~ :: =-~=m. ,~.Sl~ ~ " ,he’

ae.nno,nt f~.;. ;t..^,, .:.: .+,+ +++: . :.un’~.~.-lire’~Se~i,,l+ ~.~., ¯ ; .

MOD300008203


O

u

J

C93/4597

Alex Allan Esq - ~y ~-~Principal Private SecretaryI0 Downing StreetLondonSWIA 2AA

%

2-4 Cockspur StreetLondon SW1Y 5DI-t

Telephone: 071-211 6239Facsimile: 071-211 6249

From the Private Secretary

19 August 1993

oo ¯

’~ i~i~ ~ii

O

RUFB~ MURDOCH

I attach some briefing on the performance and ambi~s of.~lo/B for today’smeeting. I also attach a brief note on News International’s Press Interests. ! amcopying this letter to Peter Smith at DTI.

ALAN DAVEYPrhra

MOD300008204


BROADCASTING: BSKYB

Present f~nancialposition

i. In February 1993’, BSkyB aD!lOUn~d!~:l@~8,~Qf £188mbefore tax for the year ending June 1992. Turnover was £233m.

70% of the revenue came from subscriptions and 20% fromadvertising. At that time, its operating pr~fit was £1.7m aweek; in May 1992, it was breaking even. Weekly revenues were

£7m in thie nine months to 31 March 1993.

O

O

Market share

2. BS~yB’s’weekly share of viewing in homes with cable and

satellite services is about 20%. This represents only about3% of all television viewing in the UK.

3. Although 85% of homes cannot yet receive satellitetelevision, the ITV companies are becoming restive about thegrowth of BSkyB and want satellite services to be regulatedmore closely. BSkyB does not have the same requirements onthe range and quality of programmes as the ITV companies.However, it is bound by the EC Directive on Broadcasting,which requires most programmes to be of European origin, wherepracticable. BSkyB imports much of its programming, exceptfor Sky News. It plans to commission more originalprogrammes, but this is not one of its priorities.

Plans for expansion

4. BSkyB was formed in November 1990 by the merger of NewsInternational’s Sky TV and British Satellite Broadcasting.Since then, it has increased its channels and moved towards’encryption’ so channels can be received only by people whopay a subscription.

5. In September, BSkyB will launch a UK subscriptionpackage of 16 channels; six will be BSkyB ch~els and only

Sky News will not be encrypted. BSkyB is organising the

MOD300008205


O

NEWS CORPORATION’S INTERESTS (wholl[ owned~ or shares)

NEW S PAPERS

MAGAZINES

BOOKS -

TELEVISION

U.K. EUROPE

The Times Hungary:The Sunday Times Mai NapThe Sun ReformNews of the World TallazoToday

Times SupplementShoppers Friend

Harper Collins(Fontana,Grafton, Thorsons

.... &T01kien)BSkyB (6channels) 50% Antenna 3Nickelodeon, QVC

USA AUSTRALIA

’!

New York Post The AustralianBoston HerAld (national paper)

& 108 othertitles

MirabellaTV GuideFSI Division

Harper Collins(Harper Collins,Perennial &Zonderva~)Fox BroadcastingCo (+ Foxaffiliatedstations)20th Century Fox

7 titlesincluding:New IdeaTVWeekAustralian Post

Harper Collins

Seven Network(15%)

ANNEX A

]

HONG KONG/NEW GUINEA

iji Times

Papua New GUineaThe Post Courier

Honq Kong

South ChinaMorning Post

’ (50%)Sunday MorningPost (50%)Wah Kiu Yat Po(50%)

Star Television(63%)

MOD300008206


v

The Rt. Hon. Mich.ael Heseltine MPPresident of the Board of Trade

Alex Allan EsqPrincipal Private Secretary to¯ the Prime Minister10 Downing StreetLONDONSW1A 2AA

lgAugust 1993

Secretary of State

Dep~t~nent ofTrade and Industry

Ashdown House123 Victori~ StreetLondon SWIE 6RB

Direct line.071-215 4440

DTI Enquiries071-215 5000

e £Z>w

RUPERT MURDOCH

ASthisCOmpaniesrequested’week. forpleasebriefingI attaChdo notfOra sh°rthesitatethe PrimebriefingtoMinistercontactn°te °n’meS meetingtheif youMUrd°Chneedlater

anything further.

I am copying this letter to Alan Davey (DNH).

e

ELIZABETH JONESPrivate Secretary

o0o0o0

!o0o0o0

PE8044

the department for Enterprise

MOD300008207


@

@

BRIEFING FOR PRIME MZN’J:STER* S MEETING WZ~

¯ Mr Murdoch is the chairman and Chief Exe,Corporation, the Australian based media

Its principal activities include printin!newspapers, magazlnes and books; commerc:television broadcasting; film productionmotion picture studio operations.

Principal activities of associated compalpassenger and freight services; hotels almanufacture; newspaper publishing; and slbroadcasting.

Estimated turnover is £7 billion.

Rerfor~an~e

News Corporation has groWn dramaticallyIn his last Chief Executive Statement Mrtotal assets had inGreased from A$8.5 bilbillion through acquisitions and throughbusinesses, This growth was financed p:term bank debt and retained profits.

~ ~ RUPERT MURDOCH

=utiveof Newsroup.

F and pub lishlng ofal printing;and distributlon, and

~ies include airline~d resorts; newsprintLtellite television

Ln the last 6 years.Murdoch said that

Llion to a$26.2starting new

~incipally with short-

News Corporation has also been engagedprogramme of investment in its primarymore than A$4 billion. They built twofacilities in the UK and are building folaunched Sky TV, expanded Fox TV and incTwentiethCentury FoxFilm.

News Corporation curr.ently derives overand over 55% of its ~ncome from the US~=there and in the UKto increase proportigrowth from all geographic areas in the

i:~ a continuingb~sinesses amounting to

few.printing= in[Australia;:eased production at

~0% o£ its revenues~l~,,~tS results~nally. They expect~uture. By industry,

operating profit is broadly spread, but newspapers continue tocontributethe largest proportion of earnings. Magazines’contribution has been reduced with the sale of the US andAustralian operations. Television and filmed entertainmentare expected to grow disproportionately.

S~ateaicDlannina

News Corporation intends to continue to invest in multimediaand examine opportunities for owning and operating media andentertainment ventures around the world. Most recently itregained apresen=e in the Australian television industry whenit acquired a 15% stake in Seven Network.

TR2c18.8.93

MOD300008208


~’~S CORPORATION: SOME �0 CER S

NEWSPAPER T SFSZSThe Fair Trading Act 1973 provides that t~e transfer of a UKnewspaper to an existingnewspaper owner (like Rupert Murdoch)whose newspapers after the transfer would have a dailycir=ulation of 500,000 or more copies, may not be made withoutthe consent of the Secretary of State for Trade and Industry.Except in oertain limited circumstances, such consent may notbe given without there first being a report from the MMC onwhether such a transfer may be expected to operate against thepublic interest.

~OHN 8ADLER’8 REPORT ON CROSS MEDL~ pROXOTZON

John Sadler’s recommendations were directed at ~he newspaperindustry and they have been invited to develop a code ofpractice. DTI officials are in discussion with the NewspaperPublishers Association, Newspaper society and Scottishinterests about such a code.

Partly in response to concern about promotion of SkyTelevision in News International Newspapers, 3ohn Sadler wasasked by the secretary of State for Trade and Industry in 1989to conduct an enquiry into standards of cross media promotion.He concluded that as far as cross media promotion in thenewspaper industry was concerned, a code of practice should beintroduced. At a meeting with the DTI Minister for CorporateAffairs (Mr Hamilton) on 4 March the industry agreed todevelop a modified code. This is being prepared by theindustry in consultation with DTI.

DVAT ON PEBLICITIONB

Publishers are campaigning againstthe possible imposition inthe Budget of VAT on currently zero rated products. Itl iscustomary for DTI ministers to refrain from commenting on taxpolicy in the run-up to the Budget. Nevertheless the DTItakes an active interest in these issues and notes theindustry’s concerns.

MOD300008209

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